FINDER’S AGREEMENT
Exhibit
10.5
FINDER’S AGREEMENT
This
agreement (the “Agreement”) is entered into as of October 26, 2010 between
InVivo Therapeutics Holdings Corp., a Nevada corporation, including each of its
affiliates (the “Company”) and Xxxxxxx Xxxxx Ventures, Inc., a Delaware
corporation (“Finder”).
RECITALS
WHEREAS,
Finder may have occasion to introduce the Company to one or more Targets (as
defined in Section 2 below) who may be interested in engaging in a business
combination or financing arrangement with the Company which may include a merger
or purchase of some or all of the stock or assets of the Company by a Target, or
an investment in the securities of or loan to the Company by a Target
(singularly and in combination, a “Transaction”); and
WHEREAS,
the Company desires to engage the services of Finder to provide an introduction
to such Targets in accordance with the terms and conditions set forth in this
Agreement.
AGREEMENT
NOW,
THEREFORE, in consideration of the premises and mutual covenants hereinafter
contained, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. The
Company engages Finder as one of the Company's non-exclusive finders, to locate
proposed Targets interested in effecting a Transaction.
2. For
the purposes of this Agreement, “Targets” shall mean individuals, entities or
other persons (and any of their related parties or affiliates) that are set
forth on the Post-Closing Investor List (as defined in the Placement Agency
Agreement dated October 4, 2010 by and between the Company and Finder, as the
same may be amended from time to time (the “PAA”) and which is incorporated
herein by this reference), together with any new introductions made by the
Finder to the Company following the date hereof (to be mutually agreed to by the
Company and Finder). The Finder agrees not to contact any Targets for
purposes of effecting a Transaction with the Company without the prior written
approval (e-mail will suffice for such purposes) of the Company.
3.
In the
event of a consummated Transaction, the Company shall pay to Finder a cash fee
as follows:
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(i)
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7%
of the first $1,000,000 or portion thereof of the Cconsideration paid in
such transaction (as defined below);
plus
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(ii)
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6%
of the next $1,000,000 or portion thereof of the Consideration paid in
such transaction; plus
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(iii)
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5%
of the next $5,000,000 or portion thereof of the Consideration paid in
such transaction; plus
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(iv)
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4%
of the next $1,000,000 or portion thereof of the Consideration paid in
such transaction; plus
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(v)
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3%
of the next $1,000,000 or portion thereof of the Consideration paid in
such transaction; plus
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(vi)
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2.5%
of any Consideration paid in such transaction in excess of
$9,000,000.
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“Consideration paid in such
transaction” for purposes of this Agreement shall mean the value of all
consideration, including proceeds of investments and loans, paid to the
Company and/or the stockholders of the Company in connection with a
Transaction, including cash, notes, securities or other items of value exchanged
or paid at closing; assumption of debt; installment payments, deferred payments
and contingent payments (whether or not related to future earnings or
operations). Payment of the applicable fee set forth above will be made at the
closing of the related Transaction in immediately available funds.
Securities and any non-cash
Consideration paid in connection with any Transaction shall be included as part
of the Consideration at their fair market value which shall be determined by the
Company’s Board of Directors and Finder, acting in good faith, as of the day
before the closing of the Transaction; provided, however, any publicly traded
securities will be valued based on the average of the closing prices of such
securities on the primary exchange or trading system on which they are traded
for the ten trading days ending one trading day prior to the Transaction
closing. Amounts paid into escrow and contingent payments, including
interest, will be included as part of the Consideration and paid to Finder, if,
as and when actually paid or otherwise made available to the Company or
affiliated or related entities or individuals) or its
stockholders. If the aggregate Consideration in connection with any
Transaction may be increased as a result of future events or contingencies, the
portion of the Finder’s fee related to such contingent payments will be
proportionally increased and paid to Finder, if, as and when such contingent
payments are made.
For the avoidance of doubt, Finder will
not be entitled to a fee with respect to a transaction entered into with any
party with whom the Company had a pre-existing relationship prior to the date of
the specific introduction and who was not introduced to the Company by
Finder.
4. This
Agreement shall remain in full force and effect commencing the date hereof and
continuing until eighteen (18) months after the later of the (i) Termination
Date (as defined in the PAA) or (ii) the date hereof; provided, however, that
Finder shall be entitled to receive the full fee set forth in paragraph 3 hereof
in the event a binding letter of intent or other definitive agreement with a
Target has been executed during the Term with respect to a specific Transaction
and a Transaction is consummated with such Target within six months from the
expiration of this Agreement.
5. The
Company shall not be liable for any retainers, costs, expenses or other charges
incurred by Finder or third parties at the request of Finder unless the Company
has authorized such costs or expenses in writing.
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6. (a)
Finder is an independent contractor and financial advisor and is not an employee
or agent of the Company and it shall have no authority to bind the Company in
any manner whatsoever.
(b) The
Company acknowledges that Finder will not be required to conduct any due
diligence with respect to any Target and that Finder makes no representations
whatsoever with respect to any Target (including without limitation its
financial condition or its ability to perform any obligations to which it is or
may become bound), and the Company expressly agrees that Finder shall have no
liability whatsoever in connection with any Transaction it may enter into with a
Target.
7. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without giving effect to its conflict of law
principles.
8. This
Agreement, together with the PAA, constitutes the entire agreement between the
parties with respect to the subject matter of this Agreement and supersedes any
prior agreements, whether written or oral, between the parties. No
modification, extension or change in this Agreement shall be effective unless it
is in writing and signed by both Finder and the Company.
9. The
provisions of this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto, their heirs, legal representatives, successors
and assigns. This Agreement may not be assigned except upon the prior
written consent of the other party to this Agreement.
10. Any
notice hereunder shall be in writing and delivery thereof shall be complete if
delivered in person, by facsimile or mailed by overnight mail, or registered or
certified mail, postage prepaid to the following addresses (unless changed by
written notice):
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Finder:
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Xxxxxxx
Xxxxx Ventures, Inc.
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000
Xxxxxxx Xxxxxx, 00xx
Xxxxx
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Xxx
Xxxx, XX 00000
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Attention:
Xxxx Xxxxxxxxxxx, President
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Company:
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Xxx
Xxxxxxxx, 00xx
Xxxxx
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Xxxxxxxxx,
XX. 00000
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Attention: Xxxxx
X. Xxxxxxxx, CEO
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3
IN WITNESS WHEREOF, this Agreement has
been executed by the parties hereto as of the date first above
written.
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XXXXXXX
XXXXX VENTURES, INC
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By:
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/s/ Xxxxx X. Xxxxxxxx
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By:
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/s/ Xxxx Xxxxxxxxxxx
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Name:
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Xxxxx
X. Xxxxxxxx
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Name:
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Xxxx
Xxxxxxxxxxx
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Title:
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Chief
Executive Officer
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Title:
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President
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